Debating Future of Airbnb in Fairfax County

John and Mary Lou McEwan, who rent a home at 9319 Ludgate Drive in Alexandria on Airbnb, are one of two operators in the county that received a violation from the Fairfax County Department of Code Compliance, which has received 18 complaints of possible short-term rentals operating in the county this year.
Photo by Fallon Forbush.

On June 19, John and Mary Lou McEwan were ordered by the Fairfax County Sheriff’s Office to vacate short-term renters from their property at 9319 Ludgate Drive in Alexandria within 14 days and to permanently cease the use of the dwelling for transient occupancy, unless and until they obtained Board of Supervisors’ approval of a special exception for a bed and breakfast use.

“At what point in the time is it an accessory use to someone’s home versus a standalone hotel in the middle of a neighborhood?” — Supervisor Jeff McKay (D-Lee)

Right now, there are more than 300 rentals available in Fairfax County through Airbnb — all illegal.

Airbnb, which is a lodging reservation website, is just one company that gives its users the ability to list spare rooms, apartments or entire homes for strangers to book for an amount of time and fee of their choosing.

Referred to as short-term rentals, Airbnb and other companies, like Craigslist, HomeAway, FlipKey and more, are considered the hospitality industry’s segment of the sharing economy, a model where individuals directly borrow or rent assets owned by someone else.

Comparable to ridesharing services like Uber or Lyft, which disrupted the taxi industry, short-term rentals are giving people more lodging options to consider other than booking with a hotel chain or bed and breakfast.

Residents of Fairfax County cannot legally list their property for rent on these reservation websites, but that could change by next year.

The Fairfax County Board of Supervisors and county employees are considering updating the Zoning Ordinance of Fairfax County to allow for the operation of these rentals.

The zoning changes are being developed after Gov. Terry McAullife signed the Senate Bill 1578, “Short-term rental property; registration of persons offering property for rental,” into law on March 24, which authorized localities in the commonwealth to adopt an ordinance to require people to register annually in a short-term rental registry.

Taking effect on July 1, the bill defines short-term rental as the “provision of a room or space that is suitable or intended for occupancy for dwelling, sleeping or lodging purposes for a period of fewer than 30 consecutive days, in exchange for a charge for the occupancy.”

The bill defines an operator of these rentals as “the proprietor of any dwelling, lodging or sleeping accommodations offered as a short-term rental, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee or any other possessory capacity.”

People and entities already licensed or registered for rental or management of property by the Department of Health, the Real Estate Board, the Virginia Real Estate Time-Share Act, or a locality would not be required to register, according to the legislation.

The state bill also authorizes localities to impose penalties not to exceed $500 per violation to those who violate the registry ordinance.

Lawmakers Favor Local Control

Supervisor Jeff McKay (D-Lee) said the legislation was a win for the county and other localities.

“The county pressed the General Assembly to give us the authority to set our own rules for short-term rentals,” said McKay, who is the chairman of the board’s Legislative Committee and a board director of the Virginia Association of Counties.

“The Virginia Association of Counties negotiated with industry and the General Assembly a scenario that would allow counties some discretion, although not uniform discretion as to where these things go and how we can regulate them,” McKay said. “My role in this really was to protect the interest of the county and allowing us to have local land-use control and not letting the state create a one-size-fits-all solution.”

“Virginia is very diverse and what might work in Arlington might not work in Rockingham,” he added.

He and Supervisor Kathy Smith (D-Sully) are leading the charge for the county to analyze and recommend changes to the ordinance for the board to consider. On March 14, they directed the county to create a working group comprising county’s Planning and Zoning, Tax Administration and Code Compliance departments, and the Office of the County Attorney to draft the new zoning regulations and to establish the registry.

The group is also supposed to include county residents who have personal experience with short-term rentals, as well as representatives from the hospitality industry and business community.

The new regulations will address several factors: Where these rentals would be allowed in the county; how often they could be rented out; what types of properties could be rented out; and occupancy levels, parking accommodations, safety standards and other concerns that would be required from any other business enterprise in the county.

“At what point in the time is it an accessory use to someone’s home versus a standalone hotel in the middle of a neighborhood?” McKay asked. “We still have to distinguish those factors, but ultimately if you’re going to be operating a business in Fairfax County, we have a moral obligation to make sure our ordinance respects your ability to do that, but also puts in adequate safeguards to protect the public — fundamentally from a public safety standpoint and also to protect the neighbors of these residences who live in residentially-zoned areas.”

Senate Bill 1578 already standardized the consumption of alcoholic beverages for the rentals because the legislation amended the Alcoholic Beverage Control Act to classify short-term rentals as a bed and breakfast establishment for purposes of alcoholic beverage licenses.

Under this consideration, short-term rental operators would need to apply for a specialized retail bed and breakfast alcoholic beverage license if they want to provide libations to guests on premises.

There is a nonrefundable $65 application fee and a $35 license fee for bed and breakfast establishments, according to the Virginia Department of Alcoholic Beverage Control.

Matter of Balance

“It’s a balancing act,” McKay said.

Another challenge facing the working group is balancing the interests of those who are against the rentals being used in residential neighborhoods with the interests of those who want to take advantage of the sharing economy.

“These short-term rentals are obviously a part of this new sharing economy, a technology that didn’t exist years before,” McKay said.

There are vested interests in how the regulations are formulated.

“The hotel industry has a lot at stake here and we certainly don’t want to do anything that hurts our brick and mortar hotel industry,” McKay said.

The new regulations, according to McKay, would level the playing field and make sure there are certain conditions and standards for the new industry to meet.

"Home sharing has become a valuable tool for many middle-class families in need of supplemental income to help pay their mortgage, save for retirement and handle life's unexpected challenges,” said Crystal Davis, Airbnb spokesperson. “Airbnb has worked with over 250 U.S. municipalities, including the state of North Carolina and the District of Columbia, to collect and remit millions in tax revenue.”

The company has collaborated with other jurisdictions around the country to establish a licensing and registration process, according to Davis.

“We look forward to continued conversations with Virginia representatives on fair home sharing regulations that preserve neighborhood quality of life, protect communities and give residents the ability to share extra space in their homes to make ends meet," Davis said.

The working group will be hearing more from hospitality industry lobbyists across the spectrum.

“We’re going to make sure that our ordinance is fair to both [short-term rentals] and our standard brick and mortar hotels throughout the county,” McKay said. “We’re definitely going to get their input on this before anything goes to a vote. That’s for sure.”

Not a New Frontier

Zoning ordinance regulations went into effect on Dec. 31, 2016, in neighboring Arlington County before state lawmakers acted, which defined short-term residential rentals and created standards for their use.

Under the regulation, Arlington County residents have to apply annually for what is called an “accessory homestay” permit for $60.

Arlington County received 50 applications from Dec. 31, 2016, through Feb. 14, 2016, and issued 47 permits, according to an Arlington County Board agenda from Feb. 25, 2017.

Whether Fairfax County moves forward with changing the ordinance, or how it changes the ordinance depends on how the public reacts.

“We’re trying to right-size our ordinance to allow these where reasonable, but also give our community, the neighborhoods, the confidence that there’s levers of control over them so they don’t become a neighborhood problem,” McKay said.

Trouble in Neighborhoods

“It’s sort of evenly divided between people who would like to be able to use their properties for short-term rentals and then we’ve got people who absolutely do not want anybody in their neighborhood to be doing short-term rentals,” said Supervisor Penelope “Penny” Gross (D-Mason).

She said the issue has really cropped up in the Lake Barcroft area of her district. This is because the lake is privately owned and maintained through the Lake Barcroft Association, Inc.

“They own the lake and these short-term rentals in some cases have been advertising that they have lake privileges,” Gross said. “Well, not exactly.”

The Lake Barcroft Association has not yet taken a position for or against allowing short-term renters to use its lake, but its members have been speaking with Gross about their concerns, she said.

Many homeowners’ associations have written policies governing its members’ rights to list property for rent or barring members from listing property for short-term rental in their communities altogether.

Members of the Reston Association, a homeowners’ association that all Reston property owners are members of, have been vocal about curtailing short-term rental use in residential areas. The RA Board of Directors is currently considering developing policies for its members regulating or banning short-term rentals and plans on lobbying the county for its residents.

In the meantime, people continue to illegally use Airbnb and other short-term rental services throughout the county.

Over the past year, the Fairfax County Department of Code Compliance received 18 complaints of possible short-term rentals operating in the county, according to Tony Castrilli, a spokesperson for the county government.

“DCC staff investigated these complaints and found sufficient information to corroborate two [short-term rentals], one in the Mason District and one in the Mount Vernon District, for which notices of violation were issued,” Castrilli said. “Some of the other cases were closed because there was insufficient evidence that STRs were actually operating at those addresses or that there were any other zoning violations occurring.”

The property owners who were issued notices of violation were: John and Mary Lou McEwan for their property at 9319 Ludgate Drive in Alexandria and Blake and Sara Ratcliff for their property at 3320 Grass Hill Terrace in Falls Church, according to Castrilli.

“We live in a nice, quiet, safe neighborhood and I’m very concerned about my wife and daughter’s safety,” an abutting neighbor wrote in a complaint to the DCC about the McEwan’s property in Alexandria in March, according to documents obtained by John McEwan through a Freedom of Information Act request. The identities of complainants were withheld in the documents.

On May 1, John McEwan spoke to DCC staff and told them that he had rented his property for a weekend indoor Moroccan wedding when the complaint was made. He also told the employees that he would be renting it to someone for 40 days, which is longer than what the state defines as a short-term rental, according to the FOIA documents.

On May 9, DCC employees toured the rental property, a multi-level home with five bedrooms, and advised John McEwan that short-term rentals were not allowed in the county, even if the county was looking to adopt new rules and regulations, according to the FOIA documents.

From that point on, the DCC and Mount Vernon District Supervisor Dan Storck’s office received several emails from the original complainant and others stating that the house was being rented.

Many of the emails included attachments of photos of people near the home and cars parked in the driveway as evidence, according to the FOIA documents.

On May 19, a warning letter was sent to the McEwans.

“This property has had a revolving door of transients, including a large weekend event, disrupting our quiet, peaceful neighborhood, not to mention the neighbor on neighbor conflict this has created,” an email that was written to Peggy Delean, DCC Code Compliance Supervisor, said on May 25, according to FOIA documents.

“Allowing a revolving door of strangers every couple of nights does not sit well with those of us who have children, and will not add value to our properties,” the email continued. “Calling the police for noise complaints, speeding cars, neighbor disputes, or other menacing problems created by this situation is a waste of taxpayer money and police resources. What is preventing you from shutting this operation down?”

Throughout the month, DCC staff spoke with John McEwan who admitted that he was still renting his property.

On June 19, the McEwans were ordered by the Fairfax County Sheriff’s Office to vacate short-term renters from the property within 14 days and to permanently cease the use of the dwelling for transient occupancy, unless and until they obtained Board of Supervisors’ approval of a special exception for a bed and breakfast use, according to FOIA documents.

The zoning violation carried a $200 fine if they did not comply, with each subsequent offense carrying $500 fines.

“The funny thing about Airbnb is everybody uses it but nobody wants it in their backyard,” McEwan said.

But he is no hypocrite when it comes to this issue because he lives right next door to the rental property with his wife and mother in law.

“I’m next door, so nothing is going to happen without me being here,” he said. “It’s my asset. It’s my property. I don’t want my house trashed. It’s my neighborhood.”

McEwan says that there is a fairly high barrier to enter the property, which requires a $1,200 minimum fee: $200 cleaning fee; $500 a night with a two-night minimum; as well as a $1,000 security deposit, according to the property’s Airbnb listing, which has four positive reviews.

McEwan considers the barrage of emails from his neighbors to county officials complaining about his short-term Airbnb tenants to be more racially motivated than anything else, since his renters have all been culturally diverse and often different from the majority of the neighborhood’s residents.

John McEwan said he would be appealing the violation at the cost of $600 because he was told by various county employees that no citations would be given while the county considers changes to the zoning laws.

McKay could not speak to the individual cases being investigated, but he said it wouldn’t be unusual if the county waited to enforce open cases until the discussion about changing the ordinance was complete.

A majority of the cases remain under investigation, according to Castrilli.

Collecting Feedback

The county short-term rental working group is collecting public feedback through an online survey at www.surveymonkey.com/r/short-term-rentals. Residents can take the online survey and email comments or concerns to ordadmin@fairfaxcounty.gov by Aug. 31.

“There is no proposed ordinance language at this point,” McKay said. “They’re just fact-finding and sharing scenarios and experiences in the field and looking at best practices.”

The public will also be able testify at future public hearings about the new short-term rental zoning rules if such hearings are authorized and scheduled.

A Planning Commission hearing is expected in the fall with a Board of Supervisors public hearing and vote in December or January 2018, according to a memo about short-term rentals that was written to the Board of Supervisors by Deputy County Executive Robert Stalzer.